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The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.5 and a residual standard deviation of 30%. a. Calculate

The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.5 and a residual standard deviation of 30%.

a. Calculate the total variance for an increase of .15 in its beta. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Total variance

=2.8525 is a wrong answer. = 0.1989 is a wrong answer

b. Calculate the total variance for an increase of 3% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Total variance = 2.3855 is a wrong answer / = 0.1989 is a wrong answer

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